Tesla annual gross sales decline 9% because it’s overtaken by BYD as world EV chief

Tesla annual gross sales have fallen for the second 12 months in a row, a drop fueled by the elimination of the federal tax credit score within the U.S. and competitors from Chinese language automakers.

Tesla delivered 1.63 million autos globally in 2025, a 9% fall from 1.79 million in 2024, in line with figures released by the company. Notably, about 50,850 of these autos are thought of “different fashions,” a set that features the Cybertruck in addition to its older Mannequin X and Mannequin S.

Tesla reported fourth-quarter gross sales of 418,227, a 15.6% drop from the identical interval final 12 months and excess of analysts anticipated. Tesla inventory fell greater than 2% because the market opened after the New 12 months vacation.

Tesla, as soon as the worldwide EV gross sales chief, has seen its market share in Europe and China eroded by the rise of Chinese language opponents. China’s BYD, which delivered 2.26 million EVs in 2025, has now taken the highest world EV gross sales spot. Tesla can be going through extra competitors in america — though notably not from Chinese language automakers that are barred from promoting autos within the nation.

However it was the elimination of the $7,500 U.S. federal tax incentive that appears to have delivered the largest blow within the fourth quarter. Tesla offered a record-breaking 497,099 autos within the third quarter — a 29% improve from earlier quarter — as shoppers raced to purchase EVs earlier than the federal EV tax credit score disappeared. Since then, gross sales have retreated regardless of efforts to woo patrons.

Tesla’s declining gross sales comes as CEO Elon Musk tries to pivot the corporate away from the enterprise of creating and promoting EVs and in direction of AI and robotics. Musk’s pitch is there may be cash to be made in “sustainable abundance,” a catchphrase used all through the corporate’s current Master Plan IV that describes an ecosystem of sustainable merchandise, from transport to power era, battery storage and robotics.

And but, the majority of Tesla’s revenue comes from its EV enterprise. As an example, Tesla generated $28 billion in income within the third quarter, of which $21.2 billion got here from promoting EVs.